Is corporate social responsibility just about the giant, camera-friendly donation cheques? Or is it a solid business proposition? Gulf Marketing Review investigates.

Farrukh Naeem, Gulf Marketing Review

It’s almost fashionable to talk about CSR in the corporate world.

Company websites have dedicated corporate social responsibility sections; press releases are issued with pictures of CEOs holding giant donation cheques. But the scope of CSR goes beyond more than just charity, donations to development organizations or seasonal awareness campaigns.

Today, as companies struggle to come to terms with harsh economic realities, questions are being raised on whether there is any good in doing good, business-wise.

There is ample evidence that no matter the state of the economy, investment in CSR is a necessity – and an opportunity. In a study conducted by YouGov Siraj on behalf of National Commercial Bank of Saudi Arabia, more than half the respondents (56 per cent) felt that CSR attracts new investors and another 62 per cent believed that CSR facilitates the development of a stronger relationship with the organization.

The 2009 Edelman goodpurpose Consumer Study, which surveyed 6,000 consumers in 10 countries, revealed that 57 per cent of consumers chose a brand or company because of its CSR initiatives. If the quality of a product or service is the same, more than 65 per cent would readily switch to a brand that supports a good cause.

In their latest book, Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet, Jay Conrad Levinson, originator of guerrilla marketing, and award-winning marketing author and lifelong environmental activist Shel Horowitz stress that CSR, sustainability and profitability can go hand in hand.

“Not only is it a good value proposition, but those companies that ignore CSR will find themselves increasingly marginalized as more and more consumers start to really demand it,” Horowitz says. Ethical companies can slash marketing costs and boost response by forming alliances with organizations that reach their target audience, by turning customers and even competitors into brand ambassadors.

While one would think that recessions diminish the CSR effect, it’s quite the contrary. In 2009, according to the Edelman study, 64 per cent of global respondents said they would recommend a brand that supports a good cause, up from 52 per cent in 2008. The need to be an ethical and responsible company today is greater than ever.

Redefining social responsibility

In a region known for its predisposition to philanthropy at an individual, corporate and government level, it’s not hard to find numerous examples of community support through financial aid.

Especially during Ramadan, the traditional month of giving, all entities big and small do their part for the community, often without publicity, as is the Islamic tradition. But there’s more to CSR – and things are changing fast towards the global norms.

CSR in the region is moving in many instances from ad hoc activities driven by individual company founders, to a strategically aligned, competency-based activity framed by the company’s overall corporate responsibility strategy, according to Maria Sillanpaa, founding director of the Sustainability Advisory Group.

“Philanthropy aside, the region is now clearly acknowledging that corporate responsibility goes well beyond the cheque book,” she says.

The genuine concern leaders in the Middle East have for responsible business was evident at this year’s World Economic Forum. “Business needs to invest in society,” said Fadi Ghandour, founder and CEO of the Jordan-based logistics company Aramex International. “If we don’t act responsibly, who will pay the cost?”

“We are not late, but we are running fast in trying to bring social responsibility to our society,” said Mohammed Alshaya, executive chairman, Alshaya Group, Kuwait. Ahmed Mahmoud Nazif, Prime Minister of Egypt, noted that social responsibility is not just about taking care of the environment; it is about taking care of the whole society. As the need to have solid CSR planning and implementation is being realized, interesting case studies are emerging in the region.

CSR as part of brand values – the regional experience

Governments across the GCC and the Middle East are increasing their investment in community development with brands like Qatar Foundation and Dubai Cares helping local and global communities. From a marketing point of view, CSR activities are being conducted by businesses as part of their brand mandate.

In the retail sector, a brand that is doing CSR in a whole new way is Dubai-based THE One, or the ‘Total Home Experience’ brand. Its stated purpose is “to change the world together”.

Thomas Lundgren, the founder of THE One and winner of the CSR Leadership Award at the CSR Summit Awards, believes: “Whatever you do, if it’s not built into the vision or values of your company, it will never stick.” The brand trains and employs special needs staff, encourages staff volunteering, and has special products which can be bought to contribute to its CSR efforts.

With stores in Bahrain, Jordan, Kuwait, Qatar and the UAE currently, THE One aims to run 99 stores by 2020 to support 99 villages around the world through its Onederworld initiative. The first project is the Pimbiniet community in Kenya where the company is building schooling facilities, digging wells, eliminating child labor and creating volunteering opportunities. “It’s about engaging with society on a significant level and empowering our communities to evolve as a by-product of our core business.” THE One has a dedicated project blog at www.theonederworld.com where pictures and videos of the progress of the project are posted regularly.

In the technology arena, the region’s largest managed ICT cluster, Dubai Internet City (DIC), has focused its efforts in facilitating the exchange of ideas. It hosts the Indus Entrepreneurs (TiE) events to nurture the entrepreneurial spirit and facilitate start-up companies.

“During challenging times, DIC continues to initiate significantly valuable programs to support small and medium-sized business in the region,” says Malek Al Malek, executive director of Dubai Internet City.

DIC also supports BarCamp meetings in the UAE – an informal gathering of technology and new media professionals to share knowledge, exchange experiences and analyze new developments in their respective fields. To support the IT employment industry in the region, DIC is working with the career portal Bayt.com offering a series of CV clinic sessions for UAE professionals looking for employment.

This review is posted online at http://www.kippreport.com/2010/03/csr-good-business-or-pr-ploy/?bnr=